Purchase is like direct expenses?

ur legal advisor is not a finance guy.

now ask him what is the nature of expense.

any expense that can be traced to the cost of the product is direct expense. simlarly any expense incurred for bringing ur raw material to ur factory is also a direct exp. eg freight , carriage inwards etc

all the other types of expense are indirect expenses.

so accordingly ur GP & NP will change.

Originally posted by : FARHAN ABID
	ur legal advisor is not a finance guy. now ask him what is the nature of expense. any expense that can be traced to the cost of the product is direct expense. simlarly any expense incurred for bringing ur raw material to ur factory is also a direct exp. eg freight , carriage inwards etc all the other types of expense are indirect expenses.

 thanks for reply farhan bhai

the actual problem as under

me and my friend doing a backlog accounting of a party ,they doing buisness in auto parts , party doing accounting in manually, they dont khow the accounting mathod , so party legal advisor filling the return without the details of trading a/c , advisor make the balance sheet only no trading a/c (P&L A/c), now the party going to face sales tax assesment financial year 2007-2008, so that advisor give us only three figure as under.

gross received (Sales a/c) Rs.590000.00

expenses Rs.480000.00

n.p. Rs.110000.00

now we are doing transaction our as per paper record we find the detail as attach file.

boss if you have any solution for how we find opening stock a/c please suggest the method.

thanks to you

Arshad